The 2017/18 wheat crop is forecast to be 31 per cent lower than 2016/17, at 24.2 million tonnes, slightly lower than the United States Department of Agriculture's estimate of 25 million tonnes.

ABARES predicts the overall area planted to winter crops will fall by 1 per cent to 22.5 million hectares, with a drop in the area sown to cereal crops (wheat, barley, oats) and an increase in oilseeds and lentils (canola, chickpeas, lupins).

"Winter rainfall is likely to be below average in most cropping regions, according to the Bureau of Meteorology's latest three-month rainfall outlook for June to August 2017," the report read.

"But commodity prices are also poor when compared with historic averages, so there's been a shift away from crops like wheat, barley and oats and towards higher value crops like chickpeas and lentils."

Weather woes impact grower confidence

Most parts of the country received good summer rainfall which soaked into the soil, but by autumn the picture across the country had become far more variable.

New South Wales, Victoria and parts of Queensland received average or better autumn rains, while it was "extremely low to to below average" in Western Australian cropping regions, and "variable" in South Australia.

A recent business confidence survey conducted by rural lender Rabobank revealed "confidence remains relatively subdued in the grains sector, as pricing woes were compounded by the variable start to the winter cropping season, with planting rains falling short in WA, SA and Queensland".

"After enjoying excellent rainfall and a bumper crop in 2016, [South Australia's] grain producers were still looking skyward for additional planting rain when the survey was undertaken, with only patchy rains achieved since."

The results in Victoria paint a very different picture, with 34 per cent of grain growers surveyed expecting agricultural conditions to improve, and 55 expecting them to remain stable.

In the report, Rabobank's regional manager for southern Victoria and Tasmania Hamish McAlpine said the widespread autumn break had boosted confidence among the state's grain farmers.

"The winter crop, which is nearly all in the ground, has been sown into fantastic conditions. In some areas it has been a little too wet," he said.